Riyadh – Mubasher: Fitch Ratings has noted that Saudi Arabia's move to raise $10 billion through an international bank loan “reflects the pressure on its fiscal balances caused by lower oil prices that contributed to our recent sovereign downgrade.”
Demand was strong for participation in the syndicated loan, which will be KSA’s first international loan in around 15 years, the international ratings agency noted, adding that the loan comes ahead of an international bond issuance that Saudi officials say is planned for 2016.
“Over the longer term, international sovereign debt issuance may support the development of a market for Saudi corporate bonds,” Fitch added in a statement published on its official website.
Fitch added that owing to the decline in assets and the rise in debt, “we forecast the sovereign net foreign asset position to fall to 78% of GDP in 2017 from 113% in 2014.”
This will still be high, but would be less than half the ratio of the other 'AA' category in Gulf Cooperation Council (GCC) energy exporters, namely: Kuwait, Abu Dhabi and Qatar, the international agency noted.
